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SAN SHING FASTECH TW 5007. 2011.01.11. Shun-Sheng Wu Vice chairman. SAN SHING FASTECH TW 5007. Brief Profile. Founded： on July 2, 1965 GTSM ： on Jan. 17, 1998 Capital ： NT $ 2.2 billion Employees ：1,164 ( 2010.11.30) Area of Plant and B uildings ：
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2011.01.11 Shun-Sheng Wu Vice chairman SAN SHING FASTECH TW 5007
Brief Profile • Founded： on July 2, 1965 • GTSM：on Jan. 17, 1998 • Capital ：NT$ 2.2 billion • Employees：1,164 ( 2010.11.30) • Area of Plant and Buildings ： • Land －148,302.19M2， • Buildings －81,468.05M2 • The net cost of land in book value is NT$1.325 billion.
Board of Directors • Li Family firm Professional managers • All graduated from • college or above and • professional managers • They hold 38.50% • of issued shares in • total.( Nov. 2010 ) May. 2000 Board of Directors： 7 directors and 3 supervisors • Operations of board of directors： • At least once a quarter • The chief CPA is required to be present.
Management Team • Chairman of board • Mr. Chi-Yuan Ko • Professional managers Vice chairman Mr. Shun-Sheng Wu Accounting background President Mr. Wen-Chieh Lin Sales background
Position of Nut Products • San Shing is the largest nuts manufacturer in the world. • More than 95% of our products are exported. • San Shing’s export to USA is about 4.6% of USA nut import volume.
Strategy of Product Trend of Nut Products
Nuts Sales Breakdown of Main Countries by Amount 2010.01~2010.11
COMPETITIVE EDGE • Comparatively Sufficient Supply of Material • We have a long-term contract with China Steel Corp. for the purchase of wire rods to prevent the risk of rising price and insufficient supply. • San Shing is the largest customer of China Steel Corp. in the wire rod. In 2010, 70% of the raw materials are procured from China Steel Corp. • The current inventory of wire rods can meet the order of nuts over 2 months.
COMPETITIVE EDGE • High Integration • Vertical Integration in Process The continuous manufacturing system allows San Shing to retain its competitive ability and position as the benchmark of the fastener industry. San Shing integrates R&D department, technical department, machine and tooling plant, quality test lab and boasts a self-contained production process from wire pickling, wire spheroid-zing and annealing, wire drawing, forming, to the finish treatment and heat treatment.
COMPETITIVE EDGE • Develop and Produce Tooling by Ourselves The quality of forming tooling is the most important key technology of nut production process. If we can develop and produce excellent tooling, that will reduce the production cost and enhance the efficiency of nut process.
COMPETITIVE EDGE • nQuality Reputation Makes High Entry Barrier n In 1992, San Shing earned as ISO 9002. • nIn 1993, our Testing Lab. was certified by CNLA as an accredited Lab. • nIn 1996, we obtained the QS-9000 certification, required by USA Top Three Car makers. • nIn June 1997, our Testing Lab. was certified by NVLAP as an accredited lab for FQA. • nIn December 1997, our Environmental Management System obtained ISO 14001. • nIn 1999, we obtained AS-9000 certification of aerospace graded standard. • nIn 2002, we obtained OHSAS-18001 certification. • nIn 2004, we obtained TS16949 certification, required by auto companies of Europe and America market. • nIn 2006, we obtained QMI AS 9100B certification. • nIn 2006, we obtained ISO 9001：2000 certification of bolts. • nIn 2007, we obtained ISO/TS 16949 certification of nuts and bolts from TUV Rheinland, Taiwan Branch, authorized by its headquarter in Germany.
FUTURE OUTLOOK • Focusing on Developing Core Business and Controlling Outsourcing San Shing’s monthly maximum capacity can reach 6,000 tons now on custom nuts and bolts. Recently San Shing has actively and discreetly worked with subcontractors who can meet our requirements in production and quality so that we are fully capable of winning more orders and upgrading our service for customers’ satisfaction. Such a strategy extends San Shing’s capacity and increases our revenue and gross profit.
FUTURE OUTLOOK • Promoting Business of Bolts to Lead the Market of Fasteners • Fasteners include three categories： 70% bolts, 20% nuts and 10% washers. • San Shing has following existing advantages to enter the bolts domain ： • New plant is close to the existing factory and can be supported by existing organizational resources. • Having the abilities and equipments to produce tooling for bolts. 。 • Having the abilities and equipments for pre- and post- treatments of bolts. • With the same market channel as bolts and nuts.
FUTURE OUTLOOK • Selling Treasury Stocks to Reduce Liability Ratio • From 1998 to January 1999, two subsidiary corporations, hundred-percent owned by San Shing, bought San Shing’s stocks as long-term investment and never sold those stocks. These two subsidiary corporations hold 9,265 thousand stocks and 5,781 thousand stocks, respectively, total stock number is 15,046 thousand stocks, total cost is NT$ 543,073 thousand , average cost of stock is NT$36.09. • In first quarter of 2002, those stocks holding by subsidiary corporations are regarded as treasury stocks in accordance with Taiwan Statement of Financial Accounting Standards No.30 Accounting for Treasury Stock. San Shing valued each treasury stock at $8.45 based on the average price on December,2001 and hasn’t changed the valuation ever since. These treasury stocks’ average price of stock becomes $7.29 after 4 times of ex-rights. • If San Shing sells treasury stocks, we will have almost NT$543 million of cash to pay back long-term liabilities, to reduce the liability ratio below 26% and to increase shareholder’s right per share above $17.5.
FUTURE OUTLOOK • Dividend Policy • San Shing’s EPS was average NT$2 a year between 1994 and 1998, so that we paid NT$2 per share as dividends for four years including NT$6.8 stock dividends and NT$1.2 cash dividends. Share of San Shing firstly traded at NT$35, and P/E ratio 17.5 as the profits and dividends were stable. After first trading in the GTSM, San Shing’s P/E ratio had ever reached up to 20 ~ 30. • In 2010, San Shing paid NT$0.96 of cash dividends per share. We expect to pay at least NT$2 dividends per share every year from 2011. • Board of directors prefers to distribute cash dividends rather than stock dividends in the future.
